The Midas List of successful venture investors published by Forbes last month is dotted with members that have found good returns by putting money into companies from China.

So what are some of the trends affecting the venture industry here?

Chuan Thor, a managing director for Highland Capital in Shanghai , addressed that topic at a meeting of the Shanghai Foreign Correspondents Club yesterday. Thor has 19 years of experience in venture capital investments, and guided the company’s early investment in online security software firm Qihoo 360. Highland has $3.4 billion under management and holds stakes in more than 230 companies worldwide.

Other recent IPOs with market caps of more than $1 billion include Autohome, a car information company,
YY, a social site backed by billionaire Lei Jun, 58.com, an online classified ad business, Qunar, a travel site, data center service provider 21Vianet, social site
Renren, and 500.com, a sports lottery business.

And with more venture capitalists scouring China for better deals, the balance of power in the industry is tilting toward venture firms able to wield in-depth sector knowledge that can benefit entrepreneurs looking for more than just cash, Thor said. What’s more, Chinese entrepreneurs are more sophisticated about finance than in the past, and have their own ideas about that the valuation of what their company should be.

What isn’t likely to change is a recent focus on “TMT” (technology, media and telecommunications) investments and an effort among VCs to stay close to consumer-related businesses. TMT is attractive because, unlike the state-dominated energy business in China, that area is relatively open to outside firms. Consumer-focused businesses are also attractive because they often generate repeat business.

Besides the TMT area, healthcare and cleantech have promise, Thor said, though to date they haven’t yielded anything comparable to the returns venture investors have made in TMT. At least for now, Thor doesn’t see venture money investing in companies founded by foreign entrepreneurs because of the difficulties they face navigating China’s legal environment and business culture.

On the other hand, he had better news for overseas investors looking for more Chinese stocks to pick from. A trend a couple of years ago among international venture firms to raise and invest funds in renminbi has slowed down, he said. The reason: China’s IPO approval process is hard to predict, making it difficult for venture funds to sell their holdings when a successful investment is ready to go public.

As a result, more venture funds are using U.S.-dollar-related financial structures and have an eye to eventually extract their investment returns at international exchanges such as the New York Stock Exchange and the Hong Kong Stock Exchange.